Fresh reports show labor costs rising at the slowest pace on record, consumer confidence in the economy jumping to a five-year high and falling mortgage rates helping to revive sales of existing homes.
Analysts said the reports Tuesday were consistent with the Federal Reserve’s goal of a slower, but stillgrowing economy and low inflation.
The Labor Department said its Employment Cost Index edged up just 2.9 percent in the year ended March 31, the smallest increase since it began tracking worker pay and benefits in 1981. The increase was held back by the slowest growth on record in the cost of benefits, such as health care.
The index is considered one of the best gauges of wage inflation pressures since employee compensation represents about two-thirds of the cost of a product.
Meanwhile, the National Association of Realtors reported sales of existing homes rebounded 5.8 percent in March to a seasonally adjusted annual rate of 3.62 million, the first increase in three months. All regions of the country shared in the gain.
And the Conference Board said its index of consumer confidence in the economy rose this month to 105.5, from 100.2 in March. It was the highest level in nearly five years and the second straight monthly advance.
The 2.9 percent increase in the Employment Cost Index was down from the 3.2 percent gain in the first quarter of 1994. Costs during the quarter rose just 0.6 percent from the previous three months.